GFH swings to Q2 net profit

Manama, August 13, 2012

Bahrain-based bank Gulf Finance House (GFH) has registered a profit of $4.7 million for the second quarter compared to a net loss of $11.2 million in 2011 mainly driven by income earned from management fees and restructuring of debt.

Announcing the results on Monday, the leading Islamic investment bank said its net profit for the period ending June 30, 2012, rose to $5.7 million from last year's $0.7 million.

The total income for the first half reached $32.6 million, similar to last year, when the bank recorded a total income of $32.8 million. Also the bank's total expenses fell from $32.1 million to $26.8 million, thus registering a 17 per cent drop compared to the same period last year.

Commenting on the results, Hisham Alrayes, the acting CEO stated that the surge in the net profits for the first half was a result of the successful restructuring of some of its facilities, and the income earned from the management fees.

'The restructuring was extremely positive for GFH as it allowed us a greater degree of financial flexibility as we continue to focus on accelerating our business growth with the aim of returning to long-term profitable growth, as well as significantly bolstering our asset liability profile,' said Alrayes.

According to him, GFH had successfully restructured the $45 million remaining debt on a syndicated Wakala facility worth $100 million during the past six months.

In addition, the bank also obtained approval from its sukuk (Islamic bond) holders to restructure its outstanding debt amounting to $110 million.

Both debts will mature in 2018 and provide a two-year grace period for the repayment of the principal amounts, he added.-TradeArabia News Service